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Sprint-T-Mobile Merger Imminent, But For a Few Details

**Editor’s Note: Which is America’s top wireless network? Click here to see what we discovered.**

A “real-world development” has surfaced amid all of the Sprint-T-Mobile merger rumors.

A Japanese website reported late last week that Deutsche Telekom (DT), the majority owner of T-Mobile USA, has agreed to sell the Magenta Network to Sprint and its majority owner, SoftBank of Japan.

The report says that DT will hang on to a minority stake in order to seal the deal, though pricing and financing details are still being finalized. DT owns two-thirds of T-Mobile USA, while SoftBank owns about three-quarters of Sprint.

“This is an interesting, seemingly real-world development versus the usual rumors,” noted Rich Karpinski, principal analyst with Yankee Group. “We all know Sprint/SoftBank wants a T-Mobile deal. Negotiating terms with DT actually moves it forward, and DT keeping a stake is a smart move, too, as the combined operator could use all the global ecosystem support it can get. Meanwhile, SoftBank Chairman Masayoshi Son was on a U.S. stage again this week at the Code conference saying all the usual things: U.S. broadband speeds are too slow; telecom infrastructure is the key to national competitiveness; AT&T and Verizon are a money-printing duopoly; Sprint and T-Mobile are too small to compete alone. He also said he would abide by the concept of Net neutrality, likely giving the FCC a solid trade-off condition it can put on approval of a Sprint/T-Mobile merger. Stay tuned on that front — and for a press release announcing the proposed merger coming as rumored sometime this summer as this deal seems to be moving solidly forward.”

A merger between America’s third- and fourth-largest wireless operators would face considerable regulatory scrutiny. AT&T, the second-largest provider, had a deal in place to buy T-Mobile more than two years ago, but withdrew it when it became evident that regulators were going to block it.

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